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Published byEunice Dorsey Modified over 7 years ago
CONSUMER ECONOMICS I Got Paid!!!! Now What….?
Intro It’s Friday, you just got your first paycheck, and you’re feeling fye. Before you run out to buy a yacht and kick it with Jay-Z, it’s a good idea to have a plan.
Set Your Financial Goals Depending on where you are in life, you might have different financial goals. Short term vs. Long term goals What might my goals be if I am a…. Teenager College student Bachelor/bachelorette under 30 Newly married couple Couple with 2 young children Couple 10 years from retirement
Turning Your Check Into “Real” Money Companies don’t pay their employees with actual cash. Instead they issue a paycheck. Old Skool: You are given an actual paper paycheck every payday. New Skool: Your paycheck is deposited directly into your bank account (Direct Deposit).
If you get a paper paycheck… The Best Choice: Deposit your check into a checking account at a bank. You can access this money using a debit card (takes $ straight from your checking account) or by withdrawing cash from an ATM. Typically no fees are charged. The O.K. Choice: Cash your check at a bank and hold onto the cash. Easy access to $, but also less safe and more likely to spend The Bad Choice: Check Into Cash, Currency Exchanges, etc. These places charge the highest fees
More on banks…. What is a bank? A profit making business that provides financial services to consumers. Banks offer people a safe place to store their money Deposits are insured by the FDIC up to $100,000 Generally more secure than shoeboxes in the closet. Banks offer loans to individuals and businesses that need to borrow money Banks offer other financial related services
Basic Types of Bank Accounts Checking Account Used for every day expenses (gas, groceries, online purchases, etc.) Low or no interest Some still write checks, most use debit card to make purchases or get cash from ATM’s Savings Account Money that is “put away” to save for major purchases (car, home, college), emergencies, or retirement. Pays interest, low right now
Writing A Check
How interest works… Interest is how banks make money. When you deposit your $ in a bank, you are lending that bank your money and they pay you interest. When a bank lends you $, you pay interest to them. Ex. Keef deposits $100 into his checking account and receives 1% interest on his deposit. The bank loans out that $100 to Weezy and charges him 3% interest. So, the bank owes Keef $101 but Weezy owes the bank $103. $2 profit!!!!
Interest Rates Change Over Time
Online Banking Most major banks offer online banking services. While you can’t get cash from your laptop (yet), you can…… Transfer money from savings to checking Pay bills View your payments/ deposits
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